BREA, Calif.—Signaling a
paradigm shift in the organization, Beckman Coulter Inc.
recently announced the company's foray into the companion diagnostics market via an agreement with French biopharmaceutical firm Transgene to develop a companion test to be used alongside clinical trials of Transgene's
Phase III-stage anticancer candidate, TG4010.

Under the agreement, announced Jan. 5, Beckman Coulter will develop for Transgene a companion
test that measures the level of activated Natural Killer (aNK) cells in order to select patients to be treated with TG4010. The companion test will measure
triple-positive (CD16+, CD56+, CD69+ / CD45+ lymphocytes) activated NK cells. Financial terms of the agreement were not disclosed.

Transgene
's TG4010 is an MVA-MUC1-IL2 immunotherapy candidate set to enter a
Phase IIb/III clinical trial for the treatment of non-small cell lung cancer
(NSCLC)— a major public health issue with more than 1.3 million new diagnoses a year across the world, and one that claims some 450,000 lives per year in
Europe and the United States alone. It's a condition closely associated with lung cancer, with about 80 percent of lung cancer patients also receiving an
NSCLC diagnosis. Of the 1 million new cases reported each year, about 60 percent of them express MUC1, which is the target for TG4010.

While
effective NSCLC treatments are limited, TG4010 is targeting first-line treatment of metastatic NSCLC in combination with chemotherapy. Findings from the last
clinical trial in NSCLC showed that TG4010 was well tolerated and extended survival in a subset of patients with a normal level of aNK cells in the blood at
baseline.

"The idea behind TG4010," explains Transgene Chairman and CEO Philippe Archinard, calling from Paris, "is to become a new
standard in first-line treatment of NSCLC."

To accomplish that, and to complete Transgene's companion diagnostic strategy for TG4010,
Transgene knew it had to "interact with a leader in prognostics who was also knowledgeable in flow cytometry."

"It was important for us to
have someone willing and capable of doing the commercial development for this test as well as have the necessary regulatory experience," Archinard says.
"We need to make sure this test will hit the market and be available worldwide, and Beckman Coulter stood out as a global leader in this regard."

Dr. Gary Altman, vice president of market and business development for Beckman Coulter's Cellular Analysis Business Group, admits that discussions
between the two companies "took some time, because we each had some initial different goals. But we eventually compromised a bit, as usually happens in most
sophisticated business deals like this one."
Transgene, Altman adds, "has a record of accomplishment and a very well-organized, bright group of people.
As our relationship became more robust and they became more comfortable with us, and we with them, this deal blossomed into what we think will be a very
fruitful relationship for us."

"During their earlier clinical studies, Transgene
discovered a subset of patients which responded very well to the drug, and another subset which did not respond well," Reed says. "Transgene was able to
correlate the response to the drug with the expression of some markers on natural killer cells. It turns out that patients with higher activation of NK cells
responded poorly to the therapy, but patients with normal activation of NK cells responded well. We're developing tests for the markers they identified in
their trials, which will serve as criteria for patient enrollment in the next phase of their clinical trials."

The test to be developed by
Beckman Coulter will complement another test developed by Ventana
Medical System Inc. that allows Transgene to identify patients with MUC-positive tumor cells. From here, the MUC1 and aNK tests will be used in the
upcoming Phase IIb/III clinical trial with TG4010 in NSCLC. If the trial is successful and regulatory approvals are granted for TG4010 and for the tests,
these companion tests could then serve as a tool for physicians to identify patients who can be treated with TG4010 upon commercialization.

All of these companies have an additional commercial partner in Novartis, which has an option to acquire an exclusive worldwide license to develop and
commercialize TG4010. Under the terms of that agreement, Transgene will maintain co-promotion rights for certain countries and primary manufacturing rights
should the option be exercised and the product commercialized.

If Novartis decides to take on TG4010, Transgene could receive up to $939
million in development, regulatory and commercial milestones for different indications.

And staking a claim in the companion diagnostics
market may result in other, similar deals for Beckman Coulter, Altman says.

"We are pleased to be using the resources of Beckman Coulter to
get more involved with drug discovery, cell therapy and personalized medicine, and yes, we are looking for more opportunities," he says.

Based in Parc d'Innovation, Illkirch, France, Transgene's focus is on the development of therapeutic vaccines and immunotherapeutic products in oncology
and infectious diseases. In addition to TG4010, the company has three other compounds in Phase II clinical trials—TG4001/RG3484, TG4040 and JX-594/TG6006—and
one compound in Phase I clinical trials, TG4023. Transgene is also collaborating with Roche and Novartis for the development of two of its immunotherapy products, and also recently concluded an in-licensing
agreement with American firm Jennerex Biotherapeutics Inc. to develop and market JX-594 (JX-594/TG6006), an oncolytic product. Transgene has bio-
manufacturing capacities for viral-based vectors.